Indiana (IN) Paycheck Calculator 2026

Two income taxes on every Indiana paycheck: state and county

An Indiana paycheck has two separate income tax lines: the state tax at 2.95% and a county tax that depends on where you lived on January 1. Both are calculated on the same base, your wages minus the exemptions you claim on Form WH-4, so the county you live in can change your take-home pay by more than the state rate itself.

County residence is locked in on January 1 for the whole year. If you move from Marion County to Hamilton County in March, your employer keeps withholding at the Marion rate until the next January. If you live outside Indiana on January 1 but your main workplace is in an Indiana county, you pay that county’s rate instead.

Filling in Form WH-4

Indiana does not use the federal W-4. Form WH-4 asks for your county of residence and principal employment on January 1 and the number of exemptions you claim. Employers subtract a fixed amount per pay period for each one, as set out in Departmental Notice #1.

• Line 5 personal exemptions: $1,000 a year each for you, your spouse, and extra exemptions if either of you is 65 or older or blind.
• Line 6 additional dependent exemptions: $1,500 a year for most qualifying dependent children.
• Line 7 first-time additional dependent exemption: another $1,500 per qualifying first-time dependent.
• Line 8 adopted children: $3,000 a year per qualifying adopted child.
• Indiana does not honor the federal “exempt from withholding” claim, and bonuses paid separately are withheld without any exemptions.

Example: a $55,000 salary in Indianapolis

A single worker in Marion County paid $55,000 bi-weekly earns $2,115.38 per check. One $1,000 exemption is worth $38.46 per period, leaving $2,076.92 subject to tax. State withholding is $61.27 and Marion County withholding at 2.02% is $41.95, so the two Indiana taxes together take about $103.22 per paycheck.

The same worker living in Porter County would pay $10.38 in county tax per check; in Randolph County, $62.31. Our calculator uses a statewide average county rate of 1.93% by default, so enter your own county’s rate for a closer figure.

Reciprocity and cross-border commuting

Indiana has reciprocal agreements with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin. Residents of those states pay state income tax on Indiana wages only to their home state, and Indiana residents working there report the wages to Indiana. The agreements do not cover local income taxes.

That last point catches people out. A Kentucky or Ohio resident whose principal place of work is an Indiana county on January 1 still owes that county’s tax, and files Form IT-40RNR to settle it. Illinois residents get no reciprocity at all: they owe Indiana state and county tax and then claim a credit on their Illinois return.

Employers with a time and attendance system that records out-of-state work locations may skip state and county withholding for nonresidents reasonably expected to work in Indiana 30 days or less in the year. An employee can also file Form WH-4AFF to delay withholding until they pass 30 days; days worked in Indiana for earlier employers count toward the 30. The rule does not apply to anyone who is or becomes an Indiana resident during the year.